Buyers say deeptech might be Africa’s subsequent massive guess

Whereas fintech nonetheless dominates Africa’s enterprise capital, the following decade might belong to deeptech, buyers stated at SWEAT Africa, a tech gathering in Stellenbosch, South Africa, on February 13-14. 

From biotech and superior supplies to AI-driven well being options, buyers see deeptech because the continent’s most defensible innovation guess. The problem for founders lies in navigating scientific uncertainty, regulatory hurdles, and commercialisation pathways, areas the place many African ecosystems are nonetheless taking form. 

Africa’s VC funding stays concentrated in fintech and in 4 markets: South Africa, Nigeria, Kenya, and Egypt. Deeptech’s share is rising, however from a small base.

A 2025 world ecosystems index estimates Sub‑Saharan Africa’s deeptech funding at roughly $0.1 billion in 2024, versus tens of billions in Europe, North America and Asia.​

“Deeptech is usually perceived as more durable, extra regulated, extra science, extra capital-intensive. That complexity makes many VCs cautious,” stated Rowena Luk, managing accomplice at Africa Well being Ventures.

However Luk stated that, as a lot as fintech is regulated, buyers merely perceive it higher. “Many VCs come from finance, so underwriting funds infrastructure or digital lending feels intuitive. Underwriting molecular biology or medical units requires a unique ability set,” she stated. 

That hole is why specialised funds like Africa Well being Ventures (healthcare), OneBio (biotech), and Savant (deeptech) are rising to evaluate scientific danger and regulatory pathways.

AI is pushing VCs towards deeptech

Luk argued the AI world growth is making buyers pay extra consideration to deeptech. Pure software program startups are simpler to repeat now as a result of AI has lowered the boundaries to constructing them. Deeptech, however, affords stronger safety. 

Luk stated scientific innovations primarily based on discoveries will be locked in by patents, giving corporations unique rights for as much as 20 years. On high of that, regulatory approvals and scientific testing take years, creating hurdles that opponents can’t rapidly overcome.

That concept reveals up in Africa’s well being and genetics analysis. 

“We’re retrospectively what diseases individuals undergo from and why, then utilizing AI to establish danger earlier,” Wayne Shares, an investor at College Know-how Fund, a enterprise capital fund, stated. 

With restricted hospital capability throughout Africa, predictive fashions may shift care from remedy to prevention.

Africa’s various inhabitants is a strong benefit. The continent has one of many world’s youngest populations and a wealthy mixture of languages and cultures. 

“Drug discovery is essentially western-centred and resistance charges in Africa are excessive as a result of therapies weren’t developed for us. That’s the place we have now a large benefit of utilizing AI to develop domestically,” Shares added.

Behaviour change, the toughest deeptech downside for founders

For founders working in rural areas, profitable enterprise capital is about belief and altering consumer behaviour. Chigozirim Israel, founding father of the local weather‑intelligence startup Riwe, stated deeptech adoption in rural Africa relies upon as a lot on tradition as on expertise. 

“Scaling deeptech in Africa is troublesome as there are infrastructural, behavioural, and cultural hurdles,” he stated. Connectivity gaps, machine entry, and uneven authorities infrastructure nonetheless constrain deployment throughout rural Nigeria.

“They are going to solely pay for what they consider works for them. When you’ve not modified behaviour, you don’t have a scalable enterprise mannequin,” Chigozirim stated. 

Riwe gives local weather and agricultural knowledge to insurers and banks to unlock financing for farmers, a business-to-business-to-consumer mannequin that also requires farmer adoption on the bottom.

He in contrast the duty to Uber-style market creation: “We’re attempting to make accessing credit score and insurance coverage second nature. Till that cultural shift occurs, we have now a protracted street forward.”

Riwe is now in commercialisation, transferring from pilots to adoption throughout monetary establishments and farming communities. “We’re on the level of gross sales, convincing insurers and banks state by state, till adoption is mainstream,” he stated.

What African deeptech founders should present

Buyers constantly highlighted three hurdles: expertise danger, industrial traction, and staff dedication.

Shares stated buyers will fund the leap from lab validation to pilots, however not pure analysis. “When you’re nonetheless within the lab and undecided, there’s an excessive amount of technical danger,” he stated. Minimal viable merchandise, working diagnostics, units, or validated algorithms are important earlier than VC entry.

Educational founders typically deal with startups as facet tasks. “We get far too many founders the place it’s a interest; they work on weekends. That’s not the way you create success,” Shares stated. He avoids solo founders, arguing that deeptech wants mixed scientific, industrial, and operational expertise.

Jacques Grassmann, senior funding analyst, AfricaGrow, an funding fund, stated deeptech corporations should nonetheless match VC progress logic. 

“You want some type of market traction and a scalability case that’s convincing. Ideally, you perceive your clients and have income coming in already,” he stated. With out that, startups want slower, affected person capital, akin to grants.

Universities’ deeptech must exit the lab

Buyers careworn academia’s central position in producing scalable deeptech startups. Luk calls universities “the bedrock of deeptech ecosystems,” if their improvements and concepts can transfer out of the lab. 

However Africa lacks robust technology-transfer pipelines in comparison with the US or Europe.

Shares see the hole firsthand. “There are only a few deeptech buyers and lots of international locations don’t even have expertise switch workplaces to spin out analysis,” he stated after his engagements in Nigeria and Egypt, promising that science not often turns into venture-backable startups.

Accelerators and commercialisation programmes are rising to bridge this. Jacquis pointed to initiatives like BRAIN, which assist scientists transfer “between zero and one” from analysis to investable ventures. For VCs, such programmes act as pre-selection and de-risking layers.

Why deeptech wants “a village”

Houda Ghozzi, the founder and CEO of Open Startup, a non-profit accelerator, stated working deeptech accelerator programmes requires way over curriculum and demo days.

“It takes a village,” she stated. “You’re always figuring out who can join with whom, VCs, corporates, tech advisors, business specialists. It’s a mosaic of individuals you carry round startups, so that they navigate in a safer area.”

Throughout Open Startup’s decade-long portfolio of about 600 startups, Ghozzi stated roughly 60% stay energetic, and 45% have raised funding. Inside BRAIN, a programme particularly centered on science spin-outs, round 40 startups have been supported, 25 accelerated, and 17 funded, producing over $7 million in income. About 25% have tripled in valuation, and 30% expanded internationally.

Ghozzi famous that the agency focuses on regardless of problem as a result of “Science permits us to resolve the true issues of the continent, water, meals, and well being. It’s far more troublesome. However once you get there, it thrives, as a result of the market wants these options.”

The capital shift is sluggish, however underway

Regardless of structural boundaries, buyers say capital is step by step reallocating towards deeptech globally and in Africa. Luk stated as a strategic shift: “African deeptech isn’t a distinct segment play. It’s a part of a world reallocation of capital towards defensible, infrastructure-level innovation.”

For now, fintech nonetheless dominates African VC. However as AI commoditises software program and climate-health challenges intensify, buyers count on extra funds concentrating on science-driven startups, and extra founders rising from African labs able to scale globally.

Africa’s deeptech alternative is actual, however VC-ready startups should cross the toughest step: turning world-class analysis into scalable merchandise with traction, groups, and regulatory pathways buyers can underwrite.